Syndicate accounts: taxation: syndicate and personal expenses
Syndicate level expenses
The syndicate’s expenses are allowable subject to normal rules on the computation of business profits.
The main syndicate expenses are those incurred by the managing agent in respect of the active underwriter and claims handling staff, and general administration. They may be cross-checked against the managing agent’s accounts.
The syndicate managing agent will also meet certain expenses on behalf of the members. These ‘personal expenses’ are not generally shown in the underwriting account, but are deducted from the year of account balance on the balance sheet, with details of the deduction shown only in a note to the accounts.
Agents’ profit commission
Managing agent’s and members’ agent’s profit commission are examples of ‘personal expenses’.
The profit commission and salary of members’ agents are dealt with as non-syndicate matters for individuals under FA93/S172 (1)(c). An estimated deduction for member’s agents’ fees is generally shown in the notes to the accounts under the heading of ‘personal expenses’.